Sensex at 1-week low; worries over rupee, Q1 earnings hit shares

Mumbai: The Sensex on Monday dropped by 129 points to end at 17,391.98 -- its lowest closing in over a week – on fresh weakness in rupee, monsoon concerns and expectations of subdued corporate earnings.

In line with Asian indices, the BSE benchmark index opened with losses as investors interpreted the recent US jobs data and lower inflation in China as signs of a slowing world economy. Across-the-board selling started after the rupee touched a one week low of 56.07 a dollar intra-day.

A lower opening in Europe extended the weak trend in India and the Sensex closed at 17,391.98, down 129.14 points. It had last closed at a lower level on June 28 (16,990.76.)

As many as 27 constituents led by Hero MotoCorp, Tata Steel, Bajaj Auto and Tata Power of the 30-share Sensex closed lower while only TCS, Dr Reddy and Hindalco closed up.

Prime Minister's Economic Advisory Council chief C Rangarajan in New Delhi said RBI will find it difficult to cut interest rates if inflation does not soften.

Key indices in China, Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan fell by between 0.8-2.37 percent while Germany, the UK and France in Europe were also trading lower in afternoon deals.

Market participants said global stocks declined on Monday after a string of negative global developments hit sentiment, including a disappointing US jobs report and weekend comments from Chinese Premier Wen Jiabao highlighting his nation's economic pressures.

Asian stocks fell for a third day amid concern slower growth is damaging earnings and Japanese machinery orders fell more than expected, they added.

Trading in US index futures indicated that Dow Jones Industrial Average could fall 64 points on opening on Monday.

Among the sectoral indices, the BSE-Metal dropped by 1.55 percent, followed by the BSE-Power (1.54 pc), the BSE-Capital Goods (1.25 pc), the BSE-Auto (1.12 pc) and the BSE-Realty (1.05 pc).

Small-cap and mid-cap indices also declined by over 1 percent on selling from retail investors.

On macro front, the government will announce data on industrial production (IIP) for May on Thursday.

"Globally, equity and commodities investors and traders are increasing watching out for any expectation of stimulus from US and monetary easing from China. Nifty took supports at a trendline made from 4760 bottoms," said Milan Bavishi, Head Reseach, Inventure Growth and Securities.

The total turnover fell to Rs 1,818.07 crore from the last Friday's level of Rs 2,111.63 crore.